Bitcoin Fundamental Outlook


After two weeks of Bitcoin Bearish consolidation, when will it end? Take a look at the 30 January Bitcoin Fundamental Outlook as an Analyst fro Swissquote shares his viewpoint.

30 January, Swissquote – After recovering during the weekend, the price of Bitcoin has reversed momentum since Monday, sliding 6.10% from $11,770 to $11,040. Following early January dell-off – and just like Bitcoin – the entire crypto-market has been trading sideways since mid-January.

Performances of alt-coins has been quite heterogeneous as certain projects are expected to release major update or/and building expectations for major announcement in the first quarter (Populous, OmiseGo NEO/GAS or Walton); while for others, price has kept grinding lower as no major update are expected in the coming months (e.g. LINK).

Wanchain, that is seeking to create a new distributed financial structure, which would allow among other features to allow cross-chain smart contracts, is expected to be ready for trading soon. Since yesterday, ICO investors have the possibility to swap their ERC20 tokens to Wanchain Mainnet Wancoins. Therefore, this is just a matter of hours (or maybe a couple of days) before Wancoins is available for trading. It is going to rise fast!

30 January Bitcoin Fundamental Outlook

Bitcoin has suffered from bearish bets from speculators, with leveraged funds being net short Bitcoin most since the introduction of Bitcoin futures in December last year. However, according to the last CFTC report released last Friday, the wind is turning slowly as leveraged funds are now net long Bitcoin by 624 contracts.

In addition, the price of Bitcoin has been unable to break the $10,000 threshold in spite of numerous attempts. After two weeks of consolidation, we believe that the bear market is over that the momentum will reverse in the coming days.

US GDP Growth disappoints 

Friday’s Preliminary 4Q 2017 US Gross Domestic Product publication is deceiving and lies below expectations at 2.60% (consensus: 3.0%; real GDP at 2.30% and +1.50% in 2016) while December core PCE Y/Y stands at 1.50% (3Q: 1.35%), signaling a relatively weak performance, lower than 3Q GDP of 3.20%.

With a December Personal Income M/M increase of 0.40% (0.30% consensus) and Household Real Consumption of 3.80% (consensus: 3.70%; fastest pace since 2014 while savings fell at 2.40%, lowest since September 2005) confirms that US consumption steered expansion during the last quarter of the year, also supported by Trump’s tax reform outlook and US global market optimism in the stock market.

However, the drawback of this consumption boost is the increasing import rate (November 30th 2017 Y/Y: 8.40% and October 31st 2017 Y/Y: 7.0%) that underscores annual GDP.

Weakening USD (USD/EUR -2.38%, USD/GBP: -3.48%, USD/JPY: -3.09% and USD/CHF: -4.09%) might however be a driver to the 3% GDP growth target of Trump’s administration.

Due to almost full employment conditions within the US economy (US December Seasonally Adjusted Unemployment rate at 4.10%, its lowest rate since December 31st, 2000), effective corporate tax reform contribution (from 35% to 21%) to GDP growth remains limited for further growth. Government total expenditures also largely contributed to actual growth within the US economy, accounting for USD 6’586.71 billion (+1.027% increase from Q3 to Q4 2017) and remains at historical highs.

Disclaimer

This article 30 January Bitcoin Fundamental Outlook was written by  Arnaud Masset & Vincent Mivelaz, Analysts at Swissquote. While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein.

This document does not constitute a recommendation to sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investments.

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